Small businesses are afraid that banks will not help them in times of financial need


According to a survey conducted by Holm Bank, around half of small businesses feel that banks would not assist them in resolving issues they needed help with. According to the CEO of Holm Bank, the results highlight how disproportionate the market is: banks tend to focus on big, successful companies, while small and micro-companies, which are also major players in driving economic growth, are often ignored.

A total of 300 Estonian micro-companies participated in the survey of businesses with up to 10 employees, in which just 12% of them expressed their faith in banks helping them in difficult times. Almost half of the respondents (47%) disagree with the statement that banks would help micro-companies resolve their problems, while around 41% of the respondents did not have an opinion on the matter.

Mistrust of banks was reflected in a number of other responses as well. For example, the majority stated that banks do not offer small companies flexible solutions. The respondents had a negative attitude towards the readiness of banks to offer loans to small companies in general and how reasonable the interest rates are. Southern Estonian entrepreneurs were the most pessimistic, while Central Estonian entrepreneurs were the most optimistic.

According to Holm CEO Rauno Klettenberg, there were certain positive aspects for which banks were commended by the micro-companies surveyed. Namely, many of the respondents agreed that banks support entrepreneurs with professional advice in the loan application process. “To me, that’s a sign that such advice is needed by entrepreneurs and that they’ve received good advice and useful feedback from bank staff, which is essential in fostering a trusting relationship," said Klettenberg.

Klettenberg confirms that professional consultation is vital for entrepreneurs who are looking for ways of overcoming pandemic-related economic hardship. "Banks have an important role to play in recovering from the crisis, as there are lots of sectors that require a financial boost to benefit from the current economic growth and reset," Klettenberg added. “It can be seen from the survey results that a continued focus on the part of banks on the traditional model of business with big companies has left small businesses behind."

According to Klettenberg, Holm's approach is based on the understanding that small businesses are valuable employers and they can be considered one of the cornerstones of the Estonian economy. "Holm Bank offers a range of loan products aimed at small businesses, and that range will grow further in the coming years," he explained. "In our work we continue to emphasise personal consultancy so as to fund projects that could help our fantastic micro-businesses really take off in a sustainable way. That means offering flexible solutions that fit their business models, and we personally support them in the application process, if they have any questions or if they need other solutions." Holm Bank AS is an Estonian-owned bank with an operating licence issued by the European Central Bank. Holm owns the Liisi trademark, which last year celebrated its 25th anniversary. Holm Bank’s services include Liisi hire purchase, consumer loans and credit cards, as well as Holm business loans and deposit. In 2020, Holm extended its trademark to Latvia and launched its services on the Swedish market.

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